London is cheaper than ever for expat employees, latest city rankings show

by Ray Clancy on December 18, 2017

London is much cheaper for expats with cities like Athens, Moscow, Toronto, Harare, Dublin and Rio de Janeiro all more expensive, new research shows.

It means that London is a more attractive location for global companies moving employees there to work as it records its lowest ever ranking in the worldwide cost of living index from ECA International.

(c_73/Bigstock.com)

London has fallen to 139th most expensive city in the world, dropping 36 places in 12 months. Other British cities such as Edinburgh, Manchester, Cardiff and Glasgow have also fallen. The UK overall is now among the cheapest in Europe, behind Italy, Germany and France.

Cities in the United States are also cheaper and while Asian cities dominate the top 50 most expensive places for expats, Luanda is still the most costly with Khartoum in second place. In third is Zurich, followed, by Geneva, Basel and Bern.

‘The UK and mainland Europe are going in very different directions in terms of rankings as the UK struggles with higher inflation and a weak pound while the euro has strengthened,’ said Steven Kilfedder, production manager at ECA International.

‘Although doing business in the UK is now cheaper for overseas companies, the current situation will make it harder for UK companies to expand, invest and move people abroad,’ he pointed out.

There are 26 Asian cities in the top 50, just four European Union cities and three from the US compared to 14 cities in China. In Japan, Tokyo has fallen seven places and relinquished top spot in the process, falling to eighth in the table. Despite this though, Tokyo remains the most expensive location for expats in the Asia-Pacific region.

‘A booming economy and a strong currency have pushed Chinese cities up the rankings over the years. All 14 Chinese cities in our ranking have become entrenched in the top 50 over the last three years, particularly notable given that in 2012 only Shanghai and Beijing featured in the top 50 and only seven of the 14 were in the top 100,’ Kilfedder explained.

The election of President Donald Trump has coincided with a drop for all US cities featured in the rankings, as costs fall for overseas workers. The cities of Dallas and Philadelphia saw the sharpest drops, both falling 36 places while Los Angeles at 61st and San Francisco at 63rd have both dropped out of the top 50 most expensive cities in the world.

‘US cities have dropped in the rankings due to the fall in the value of the dollar and the thriving euro, meaning US cities have been overtaken in the table by many in the Eurozone. After initially rising following Trump’s election, the US dollar has fallen as his administration has stumbled. We could see this trend reversed next year if President Trump’s tax bill is passed, as long as money moves back into the country and interest rate rises become more likely,’ Kilfedder added.

The Swiss cities of Zurich, Geneva, Basel and Bern maintained their positions in the top 10 most expensive cities due to a strong franc and a rich, thriving economy, while all Scandinavian capital cities remained in the top 10 most expensive cities in Europe.

‘It’s hard to see Swiss cities leaving the top 10 any time soon, but it has been a remarkable year for other European cities as growth has exceeded expectations. Many cities in Europe have leapfrogged others in the rankings with the euro now one of the world’s strongest currencies while currencies have weakened elsewhere,’ said Kilfedder.

Moscow was another significant mover in this year’s rankings, jumping 53 places from 118th to 65th in the last 12 months, re-entering the world’s 100 most expensive cities for the first time since 2014. The strengthening of the rouble also saw St Petersburg rise 36 places in the last year.

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